Agile legal services: overcome objections and become a more productive and innovative law firm

Improved results when managing complex legal cases, it is contended, are most likely to flow if such matters are managed according to Agile principles. Moreover Agile techniques appear most appropriate where legal work is priced according to value rather than by time, an approach which is of increasing interest to lawyers. Why then, the apparent lack of enthusiasm for Agile in the legal services industry?

Agile is quite a radical approach. Objections to, and reservations about, Agile are common in other industries not just legal services. For an excellent summary of such objections – and how they can be overcome – see an article by Steve Denning, as part of his Agile series in Forbes Magazine. In this post I want to highlight some objections to Agile most relevant to law firms, and speculate why Agile has is apparently not been used more widely to assist with the delivery of legal services and solutions.

I suspect that Agile has simply not been tried, or tried consistently, in law firms so no-one really knows whether it does actually work or not. It can take considerable time and effort to overcome objections and, once the objections overcome, further time and effort to adopt an Agile approach.

During the last few years techniques derived from Lean / Six Sigma have been increasingly deployed by law firms, particularly in the United States and Canada. Lean / Six Sigma techniques hold out the promise of reducing waste and inefficiency. Few people in the legal services industry doubt there is a continued need for greater efficiency in both ‘back-office’ and ‘front-office’ processes. It therefore makes sense to deploy scarce project expertise with the aim of ‘reducing waste’ – that very phrase must resonate with many finance directors and managing partners. Greater efficiency is one step towards improved productivity and there are a number of means available to achieve productivity gains, including Agile. In his book, The Leader’s Guide to Radical Management: Reinventing the Workplace for the 21st Century, Denning notes (P. 52) that in organisations which have implemented an Agile approach:

The best teams routinely obtain productivity increases of 200 to 400 percent, changes that are potentially industry-disruptive improvements.

Perhaps the most important thing to appreciate at this point is that these approaches – Agile, Lean and Six Sigma are not necessarily mutually exclusive. Indeed one might expect a fully mature legal services organisation (in terms of Project Delivery Capability – PDC) to apply all of these techniques, as and where appropriate, part of an over-arching Legal Project Management framework for legal service delivery.

Focusing on efficiency alone is a limiting strategy, as the well-known quote of Peter Drucker’s brings into sharp relief:

Efficiency is doing things right; effectiveness is doing the right things.

Many advocates of Lean / Six Sigma are at pains to stress the emphasis on ‘client need’ and streamlining processes which add most value to client work – ie streamlining the ‘right things’. My assertion however is that an Agile approach increases the likelihood of actually ‘doing the right things’ in light of changing circumstances, particularly in complex matters.

The ability to react creatively and, along the way, contain costs in light of change should be prized in a value pricing environment. An often cited tool for the successful implementation of value pricing is the existence of a clearly defined change control procedure. If circumstances change materially since the original price quotation then the change control procedure can be invoked, leading to reassessment of what needs to be done and perhaps a revised quote. It seems to me that change control procedures work well where the ‘change event’ and its consequences are clearly identifiable and so provide an uncontroversial trigger for the reassessment exercise. What if the change event is not so easy to discern or its consequences appreciated? Lawyers are trained to pore over wording and argue finely tuned distinctions. The last thing lawyers want (presumably) is to be arguing with clients about what amounts to changed circumstances necessitating price recalibration. Common sense should go a long way to reducing the possibility of such disputes, but wouldn’t it be far better if lawyers simply coped and found ways to manage costs in any event? An Agile approach should allow lawyers to do this with confidence.

In his Forbes article Denning notes two common objections to Agile which seem especially relevant to law firms. The first is that ‘our firm’s individual accountability systems don’t fit Agile’ which in a law firm setting translates to ‘our lawyers are assessed according to the number of hours billed’. As Denning says ‘the answer is pretty simple: change the organization’s reward system. They are the problem, not Agile’.

Of course there is a more fundamental issue for law firms, in that they really need to move away from hourly billing towards a true value pricing regime wherever possible. It is commonly accepted that a good pricing strategy is the single most reliable way for improving law firm profitability and that value pricing, implemented correctly, is the most profitable technique of all. It should also follow that lawyers’ compensation systems should reflect things other than hours recorded and billed. Things like delivering legal solutions on time, working collaboratively (including knowledge sharing) and demonstrating flexibility and innovation. All these traits are most likely to be encouraged in an Agile environment.

Another common objection to Agile noted by Denning is that ‘Agile doesn’t fit our organizational culture’. The suggested answer here, of course, is to change the culture. A key element of Agile is the notion of self-organizing teams. Teams are trusted to provide estimates for completing the work, to do the work, and make decisions about how excactly the work is done. All team members are expected to contribute and all team members are afforded mutual respect, as even the least experienced can come up with useful insights. It follows that productive Agile teams tend to be less concerned with individual team member status in the organisational hierarchy. Does this sound like a typical team in a law firm?

Over at the Legal Watercooler blog it has been said that ‘we work at a law firm = we work in a dysfunction[al] environment’ and that, more often than not, legal teams exhibit all the classic traits of dysfunctionality. Changing this culture is not going to be easy, nor quick, but as the Legal Watercooler post points out whilst referring to Patrick Lencioni’s book, The Five Dysfunctions of a Team: A Leadership Fable, it is eminently possible to improve team working in law firms.

Arguably, cultural change in law firms will inevitably come to pass. The forces pushing for widespread change of all kinds throughout the legal industry are simply too great to be resisted. It makes sense for law firms to seek to change before they are forced to, or worse, before it becomes too late for them to do so (because they will no longer be in business). One element of the required change is to transform the way teams of legal professionals – and others who make up the ‘delivery team’ – work together. A culture of mutual respect where ideas can be traded freely and tested in controlled circumstances is required for organisations to develop and innovate – exactly what is required of law firms in the new competitive arena of legal services. Such a culture is most likely to be developed in an Agile working environment.

Agile is radical approach and therefore it comes with some risk. As Bruce MacEwen has noted in article six of his ‘Growth is Dead’ series, it seems a strong trait of lawyers that we (I am solicitor by training) have a very low tolerance of risk and with it the potential for failing:

We cannot willingly enter into situations where failure comes with the territory. We can’t weather the criticism, can’t risk the second-guessing, don’t have the emotional fortitude or resilience to explain why what we did was a thoughtfully calculated risk and one we’d do again.

MacEwen also points out that often the most effective kinds of innovation involve the transfer and adaptation of ideas and processes found in one industry to another. Agile techniques are most commonly associated with the software development industry and I maintain that their transfer and adaptation to the legal services industry could prove fruitful. Arguably they could go a long way to transforming standard legal service providers into outstanding legal solution providers. The latter would then have an opportunity differentiate themselves in a very competitive market by consistently delivering swift legal solutions which are cost effective to produce and score highly against client value criteria.